Volume boost lifts General Mills - Brief Article - Statistical Data Included

Eurofood, Sept 23, 1999

A 5% increase in domestic volume sales despite a highly competitive market helped US cereals and food group General Mills to a 7% increase in turnover for the first quarter of fiscal 2000 to US$1.57bn (??1.51bn). After-tax profits for the three month period to 29 August were ahead 9% to US$158.5 m, and the group is predicting good growth for the remainder of the year as the combination of strong volume growth, margin improvement and increased contributions from international operations continues.

Of the 5% rise in domestic volumes, 3% came from ongoing operations and the remainder from new acquisitions Farmhouse Foods, Lloyds and Gardettos. The group's Big G cereal arm lifted its volumes by 3% compared to flat sales for the sector as a whole, thus lifting its market share to above 26% by volume (32% by value). The increase was due to both established brands such as Cheerios and Wheaties and to new launches such as NesQuik.

MIXED RESULTS FOR SNACKS

Also in the US, General Mills' convenience foods division saw a 3% volume hike, led by the Yoplait and Colombo yoghurt brands, while the Pop Secret and Nature Valley snack brands were also among the leading performers. However, other snack brands fared less well, pushing down overall snack volume sales to below the 1999 level. Betty Crocker brand baking products increased volumes by 3%, while the foodservice division lifted its sales by 5%.

CPW GROWTH

International operations saw a 1% increase in volume sales, pushing up profits by a double-digit rate. Cereal Partners Worldwide, the joint venture with Nestle of Switzerland, pushed up volumes by an impressive 9%, and its global market share rose to 19%. Another joint venture, Snack Ventures Europe with fellow US group PepsiCo, registered a decline in first quarter volumes of some 6% due almost entirely to the Russian crisis; volumes in core western European markets were some 5% higher than in fiscal 1999. Canadian volumes were down 3%, although retail cereal sales rose during the period.

General Mills, first quarter results (US$m)

                       1998      1999

Sales                1 473.1   1 573.6
Pro-tax profits(*)     228.1     245.8
Net profits            145.0     158.5

Source: General Mills.

Note: (*) includes profits from JVs.